Telecommunications company Avaya, which has been struggling under the weight of its $6 billion debt load this year, is reportedly considering the sale of its call-center business and a possible Chapter 11 bankruptcy filing.

Last week, reports surfaced that buyout firm Clayton, Dubilier & Rice (CD&R) were in talks to acquire Avaya's call center business for around $4 billion. While this sale would go a long way toward eliminating its debt, it might not be enough to allow Avaya to successfully shift away from its legacy hardware business into a software and services company. The Santa Clara-based company faces a $600 million debt maturity due next October, and an additional $5.3 billion maturing between 2018 and 2021.

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Avaya's earnings are strong, with last quarter's preliminary earnings report showing revenue standing at about $950 million. But with a $400 million yearly interest expense, it's posting consistent losses. The debt comes largely from a 2007 leveraged buyout to the tune of $8.2 billion by private equity firms Silver Lake Partners LP and TPG Capital LP. It was bad timing for such a deal. Right after the buyout, the financial crisis hit, and Avaya hasn't posted an annual profit since.

Back in May, Avaya was rumored to be working with Goldman Sachs regarding possible sale opportunities. Avaya President and CEO Kevin Kennedy did confirm that Goldman Sachs is “helping Avaya evaluate expressions of interest that have been received relative to specific assets, as well as explore other potential strategic opportunities." In August, a group of Avaya creditors engaged in discussions about restructuring the $6 billion debt load.

If both the call center sale and the bankruptcy go through, Avaya has a good shot of coming out the other side of this a more nimble company better equipped to compete with Cisco and the many agile startups catering to enterprise communication demands. It has a strong portfolio but has been unable to catch up to competitors that are successfully developing cloud-centric applications. The company has also struggled to integrate its older product lines, channels and services with those it's acquired through buyouts of such companies as Octel and Nortel.

The Wall Street Journal has reported that the bankruptcy filing could come as early as next month.

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